Correlation Between NMI Holdings and EQT AB
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and EQT AB at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NMI Holdings and EQT AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and EQT AB, you can compare the effects of market volatilities on NMI Holdings and EQT AB and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NMI Holdings with a short position of EQT AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and EQT AB.
Diversification Opportunities for NMI Holdings and EQT AB
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NMI and EQT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and EQT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT AB and NMI Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NMI Holdings are associated (or correlated) with EQT AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT AB has no effect on the direction of NMI Holdings i.e., NMI Holdings and EQT AB go up and down completely randomly.
Pair Corralation between NMI Holdings and EQT AB
Assuming the 90 days horizon NMI Holdings is expected to generate 0.59 times more return on investment than EQT AB. However, NMI Holdings is 1.69 times less risky than EQT AB. It trades about 0.08 of its potential returns per unit of risk. EQT AB is currently generating about 0.04 per unit of risk. If you would invest 1,940 in NMI Holdings on August 26, 2024 and sell it today you would earn a total of 1,640 from holding NMI Holdings or generate 84.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. EQT AB
Performance |
| Timeline |
| NMI Holdings |
| EQT AB |
NMI Holdings and EQT AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and EQT AB
The main advantage of trading using opposite NMI Holdings and EQT AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, EQT AB can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EQT AB will offset losses from the drop in EQT AB's long position.| NMI Holdings vs. USWE SPORTS AB | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. Ming Le Sports | NMI Holdings vs. DICKS Sporting Goods |
| EQT AB vs. The Bank of | EQT AB vs. Ares Management Corp | EQT AB vs. Superior Plus Corp | EQT AB vs. NMI Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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